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Friday, May 13, 2011

Court Orders Workers Compensation Insurance Carrier to Comply With OSHA Subpoena

The workers’ compensation insurance company, who provided coverage to an employer where a double fatality occurred when a grain elevator exploded, has been order by a US Federal Court Judge, to comply with a subpoena issued by The Occupational Safety and Health Administration [OSHA] directed to obtain information about the safety of the facility. The opinion entered by Judge Philip G. Reinhard, adopts the report and recommendation of the magistrate judge, requires that custodian of records of the workers’ compensation insurance company testify and present documents concerning inspections and reports it prepared as to the employer, Haasbach LLC.

The Court reasoned that OSHA had the authority under Federal law to conduct inspections and investigation including requesting attendance and testimony of witnesses. 29 U.S.C. 657(b). The Court also held that OSHA’s request for loss control reports for 4 years prior to the accident were reasonably related to the investigation. The workers’ compensation insurance company will also be required to produce: site safety inspections, applications for insurance coverage for the site, and correspondence between the insurance carrier, Grinnell Mutual Reinsurance Co., and the the employer, Hassbach, concerning the site.

OSHA had issued 25 citations ($555,000 penalty) to the Illinois grain elevator operator, Haasbach LLC, following an investigation into the deaths of two young workers, Wyatt Whitebread and Alex Pacas (ages 14 and 19 years old, respectively), at the company’s grain elevator in Mount Carroll, Illinois. A third worker was injured at the time of the accident, when they were “walking down the corn” to make it flow while while machinery used for evacuating the grain was running.

Grain entrapments kill workers. All employers, especially those in high-hazard industries, must prevent workers from being hurt or killed as a result of recognized hazards,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “There is absolutely no excuse for any worker to be killed in this type of incident.”

OSHA Assistant Secretary Dr. David Michaels praised the decision. “The court affirmed OSHA’s authority to obtain relevant information from an employer’s workers’ compensation insurance company. This is not surprising legally, but it does illustrate that workers’ compensation and OSHA are not separate worlds divorced from each other,” he said. “Workers’ compensation loss control activities overlap with OSHA’s efforts to bring about safe and healthful workplaces, and in order to achieve a safe and healthful working environment for all Americans, all efforts of business, insurance, labor and government must move forward together.”

Judge Reinhard held that disclosure of the information into the public domain was permissible unless a federally recognized attorney-client privilege existed due to a pending state court action. If such a privilege was to be asserted as to certain materials that would be required to be produced, then the parties may submit a privilege log to the magistrate judge for consideration.

Solis v. Grinnell Mut. Reinsurance Co., 2011 WL 1642534 (N.D. Ill) Decided May 2, 2011
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